News

The founder of a scandal-hit apprenticeship provider has been disqualified from acting as a director for six years after investigators found he paid himself nearly £1 million while his firm slid into administration.

Elmfield Training – one of the country’s largest providers of apprenticeships that received more than £100m in public money – was wound up in 2013 owing 180 companies more than £11m.

It followed extensive investigations from FE Week that revealed alleged malpractices at the firm – founded by Gerard Syddall – leading to a Skills Funding Agency (SFA) investigation.

But Mr Syddall finds himself embroiled in a fresh controversy this week after insolvency investigators found he personally benefited from the company to the tune of nearly £1 million – just months before it went into administration.

Mr Syddall clearly put his own interests ahead of those of the company

The Insolvency Service found the firm was experiencing cashflow difficulties at the time in March 2013 and Mr Syddall had given an undertaking to the board of directors he would not use company funds for his own benefit.

But investigators found that Mr Syddall, and people and companies connected to him, went on to receive nearly £954,000 from Elmfield.

By the time it went into administration in October that year, Mr Syddall owed the company £2.6 million.

In a scathing investigation report, released yesterday, investigator Robert Clarke said: “Mr Syddall clearly put his own interests ahead of those of the company.

“To make matters worse, this was after he had vowed to the company’s board that he would not do this.

“Directors of companies should know that this type of conduct is not acceptable and, in such circumstances, the Insolvency Service will take action against them.”

Mr Syddall has been disqualified from acting as a director until February 2022. He was adjudged as bankrupt in April 2015.

Mr Syddall was hauled infront of a Business, Innovation and Skills (BIS) select committee in 2012 and accused of a “rip off” over high profits.

He was questioned about the £12m profit made by his company in 2010, all from government funding – first revealed by FE Week. A total of £3m of that went directly to Mr Syddall as a dividend.

After FE Week revealed the firm’s “appalling” pass rate, it was given a grade four rating from Ofsted leading to Mr Syddall’s resignation as chief executive.

A BBC investigation – supported by information from FE Week – then revealed employees were “routinely asked to alter forms to claim funding for staff who never wanted to do an apprenticeship”.

The firm went into liquidation. A later SFA investigation cleared the company of falsely claiming for learners, but found “weakness in their controls that were not good practice”.

Ofsted found the number of learners who completed their qualification in the expected time “continues to decline” and reached an “unacceptable low” 23 per cent in retail apprenticeships, which make up the majority of Elmfield’s provision.

It’s encouraging to know some justice has been served, there is still much work to do though elsewhere, in particular on some direct grant holders ( some very large UK and global employers) that feel they are an entity unto their own rules and rights, and that don’t necessarily need the public funds as they are extremely lucrative businesses. Personally I feel that the NHS would use the money for far more needy causes!!